Bank of Russia Proposes Crypto Investment Pilot for High-Net-Worth Investors

The Bank of Russia has submitted proposals to the government for a controlled experiment allowing a “limited group of Russian investors” to trade cryptocurrencies, based on a directive from the country’s President Vladimir Putin.

The plan would introduce an experimental legal regime (ELR) lasting three years wherein “particularly qualified” investors would be allowed to conduct cryptocurrency transactions, according to a statement from the central bank.

To be considered “particularly qualified,” individual investors would need to have over 100 million rubles ($1.14 million) in investments or an annual income exceeding 50 million rubles ($570,000). Institutions recognized as qualified investors would also be able to trade cryptocurrency.

The initiative aims to establish standards for crypto-related services and increase market transparency while expanding investment opportunities for “experienced investors willing to assume higher risks.”

The Bank of Russia repeated its warnings about the volatility and risks of the cryptocurrency market, emphasizing that they are not backed by any jurisdiction. In line with its stance, the central bank proposed banning cryptocurrency transactions between residents outside the ELR and enforcing penalties for violations.

Beyond direct cryptocurrency trading, the Bank of Russia plans to allow qualified investors to access derivatives and securities linked to digital assets, provided they do not involve direct cryptocurrency ownership.

The move is Russia’s latest foray into the cryptocurrency space. Last year, the country’s lower house of the Federal Assembly, the State Duma, passed two bills legalizing cryptocurrency mining and bringing in an experimental regime on cross-border settlements and exchange trading in digital currency.

The country’s central bank is looking to get its largest banks to support a digital ruble for retail and commercial use later this year. The country has been heavily sanctioned by the U.S. and Europe after its invasion of Ukraine, and the central bank digital currency is seen as a way to circumvent the financial restrictions it’s facing.

Back in 2021, the Bank of Russia said that the ruble-backed central bank digital currency could be used as a tool against sanctions.

Disclaimer: The information gathered for this article was translated with the use of artificial intelligence.